Foreign Exchange : Dollar Falls in Quiet Trading

The U.S. dollar declined Monday in quiet, pre-holiday trading on world currency markets. Gold edged up 50 cents to $393 an ounce.

Traders said the dollar was pushed lower in the thin market by a relative lack of end-of-the-year demand from corporate interests and the expectation of discouraging U.S. economic news in the early part of the new year. The Iran arms scandal also is contributing to the dollar’s bearish tone.

“The Europeans are very, very bearish on the dollar,” said one dealer at a big New York bank. The dollar’s recent slide mainly has been attributed to a lack of favorable U.S. economic news.

Traders said most market participants were avoiding any major transactions as the Christmas holiday period neared.

The dollar lost ground against the Japanese yen for a third consecutive day, closing in Tokyo at 163.08 yen, down from 163.15 yen on Friday. The dollar slipped to 162.60 yen in London as trading shifted to Europe, and then it stabilized in U.S. trading, closing at 162.61 yen in New York.